'Gifs are cool': how Giphy's million-dollar business went out of fashion | Page - Medium Wire, News, Business, Finance, Entertainment,

It is rare for a multi-million dollar company to explicitly state that its business is dying because it is simply too uncomfortable to live.

But that’s the bold strategy gif search engine Giphy has adopted with the UK competition regulator, which is trying to block a $400m (£352m) bid by Facebook owner Meta.

In a filing with the Competition and Markets Authority, Giphy argued that there was simply no company other than Meta that would buy it.

Its valuation is down $200 million from its peak in 2016 and, more importantly, its core offering is showing signs of going out of fashion. “There are indications of a general decline in the use of gifs,” the company said in its filing, “due to a general decrease in user and content partner interest in gifs.

“They’ve fallen out of fashion as a form of content, with younger users in particular describing gifs as ‘for boomers’ and ‘cool’.

To underscore the point, the Giphy record included links to several articles and tweets.

Someone told me last week that GIFs are for boomers, and I’ve felt self-conscious ever since

— Chris Brown (@almostcmb) July 14, 2022

The generation gap is real, says internet culture writer Ryan Broderick. “Gifs feel incredibly dated. They were never easy to make and didn’t work particularly well on mobile.

“So now they’re basically the backlash image your millennial boss uses on Slack. Instead of what they used to be, which was kind of a decentralized image for communication on blogs and message boards. It’s actually kind of sad how stifled the gif was by big corporations, copyright laws, and mobile browsers.”

The animated gif is also comfortably millennial: invented in 1989, it predates not only smartphones and social media, but the World Wide Web. It exploded in popularity with the growth of the web as the easiest way to add animation to a page, but slowly lost ground to other ways of displaying pictures that required less of the time-limited bandwidth.

Its resurgence came in the late 2010s, alongside the rise of the Tumblr social network. Although gifs were never meant to be a replacement for video, faster internet connections meant they were once again the easiest way to share short clips – too short to make sense on their own, but perfect to add context and color to posts in the form of “reaction gif”.

I just learned how to use reaction gifs and teenagers are now informing me that gifs are “crass”

— Dan Robinson (@danrobinson) June 30, 2022

Popularized by Tumblr blogs like What Should We Call Me, which curated a perfect selection of responses for every situation, reaction gifs quickly became synonymous with the format itself. Why reply to a post with “OMG” when you can post a quick clip of Donald Glover from the sitcom Community walking into a burning room carrying a stack of pizza?

At the height of its cultural influence, creating, posting, and curating gifs could easily have become a full-time job. The best creators were known for the speed with which they could capture moments from TV shows or live events during broadcast, as well as their ability to massage the format to keep frame rates high and file sizes low. .

But while more dedicated posters kept huge archives of their most used gifs, carefully sorted and tagged, for many, tracking down the right one to use in every situation was tedious .

That’s the problem Giphy tried to solve when it was founded in 2013. As a “gif search engine,” the company collected more than 300,000 from around the web, tagged and categorized them, and helped users find exactly what they were looking for. the right one for any given situation.

“Giphy was conceived over breakfast with my project partner, Alex Chung, while thinking about the growth of purely visual communication,” co-founder Jace Cooke said in a 2013 interview with the Daily Dot. “We both couldn’t understand how hard it was still to find and share gifs and thought we could do something about it.”

But democratizing gifs also sowed the seeds of their destruction. “Regardless of design or intent, Giphy’s search tools led to an apparent monotony in gif culture,” said Brian Feldman, an Internet culture writer in 2020.

“The same principles that apply to Google seem to apply to Giphy: if you’re not in the top three results, you might as well not exist. Reaction GIFs became flatter and less varied.”

Technical changes made the problem worse. The same reasons why the gif died the first time hadn’t gone away: the technology produces large files with poor image quality.

Although sites like Twitter and Facebook built support for posting gifs, they also modified them, turning them into video files to display them more efficiently on mobile devices. This meant that users couldn’t just download a gif they saw and save it for later, which further flattened the available selection.

The top gifs of the past year tell their story. As Giphy grew as a business, to the point where its annual revenue is now estimated at $27.5 million by analysts GrowJo, it also hit another problem: copyright.

The company’s response was to partner with media outlets to host original gifs, and today, nine of the top 10 gifs on the site in 2021 were posted there by the company that made them, in a cross-promotional push to encourage content viral.

The #1 gif of 2021 was a slow zoom of the character Stanley from the US version of The Office – a clip of a 15-year-old episode of a show that was even old before Giphy was founded. Second place is a clip of Tom, Tom and Jerry falling asleep on a pillow; the third is from a contemporary source, a picture from Bake Off looking shocked. Only one, a cartoon of a happy fat duck jumping, was created by someone other than a major media partner.

Giphy even lists its “ability to retain key content partners” as a key reason for the CMA to allow it to proceed with the Meta acquisition, arguing that a less respected owner could jeopardize the relationship.

But the gif has surpassed even Giphy. Gif keyboards on apps like WhatsApp and Twitter may not use the entire service — competitors like Tenor, which was bought by Google for an undisclosed amount in 2018, also exist — but they all have the same effect: making it easier for people to send each other quick shared clips. And yes, that includes boomers.